US STOCKS-Lower open seen with financials set to drag

                                
 * Financials set to drop on credit worries
                                
 * McDonald's stock downgraded by UBS
                                
 * JPMorgan sees consumer portfolios deteriorating
                                
 * Oil rebounds after BP shuts pipeline on Georgia conflict
 (Recasts first paragraph, updates prices, adds BP shutting
pipeline in last paragraph)
                                
 By Ellis Mnyandu
                                
 NEW YORK, Aug 12 (Reuters) - U.S. stocks headed for a lower
open on Tuesday as worries about the impact of the credit
crisis on the financial sector overshadowed hopes that a recent
drop in oil prices will shore up corporate profits.
                                
 Traders were nervous that oil may halt its recent drop
after a pipeline to a Georgian port was closed due to the
fighting between Georgia and Russia.
                                
 News that JPMorgan Chase <JPM.N> , the No. 3 U.S. bank, has
taken another $1.5 billion of write-downs in the current
quarter to date fueled concern that fall-out from the housing
slump is far from abating. For details, see [ID:nBNG180409]
                                
 Swiss bank UBS AG <UBSN.VX>  posted a worse-than-expected
second-quarter loss, hurt by fresh write-downs and a wave of
clients withdrawals. Looking ahead, UBS said it will split off
its investment banking unit that made it Europe's top casualty
of the credit crunch. [ID:nLB144790]
                                
 With the precipitous drop in oil prices helping to lift
stocks from their July low, unease about the financial sector
undermined hopes that cheaper energy prices would revitalize
consumer and business spending, thus brightening the profit
outlook. JPMorgan shares declined more 2 percent before the
bell.
                                
 "The thing about this most recent rally is that it has
pushed people to look forward. Unfortunately we still have the
current realty with us," said Rick Meckler, president of
investment firm LibertyView Capital Management in Jersey City,
New Jersey.
                                
 "You're going to continue to get write-offs from the
financial sector. Investors will either look past that or
periodically they are going to stare at that with shock and
cause sell-offs.
                                
 S&P 500 futures <SPc1>  slipped 5.10 points and were below
fair value, a formula that evaluates pricing by taking into
account interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures <DJc1> declined
45 points and Nasdaq 100 <NDc1> futures fell 2.25 points.
                                
 U.S. front-month crude <CLc1>  reversed direction and was
trading higher at about $115 a barrel after BP <BP.L>  said it
has shut an oil pipeline to the Georgian Black Sea port of
Supsa because of the military conflict between Russia and
Georgia. The closing limited export options from the landlocked
Caspian Sea. [ID:nLC267213]
                                
 JPMorgan Chase said in a regulatory filing it expects
continued deterioration in credit trends for its consumer
portfolios and that could require additional allowances for
loan losses. Lehman Brothers cuts its 2008 profit forecast for
JPMorgan.
                                
 Adding to the financial sector's gloom, Wachovia Corp
<WB.N>  increased its previously reported second-quarter loss
late on Monday to $9.11 billion to cover costs to settle a
probe of auction-rate securities sales. The fourth-largest U.S.
bank also said it will cut more jobs. [ID:nN11398942]
                                
 Shares of JPMorgan fell to $40.99. Wachovia shares dropped
2.7 percent to $17.71 before the bell.
 (Editing by Kenneth Barry)